COVID caution leads to "psychologically-mandated" shutdowns for hospitality operators

"It’s something that we never thought would happen. We’ve shifted from the government-mandated shutdown to a psychologically-mandated shutdown where people are just not going out right now," says Justin O'Donnell, CEO of hospitality point-of-sale tech company Doshii and co-owner of The Park Darlinghurst.

The head of a Commonwealth Bank-backed tech company servicing hospitality venues nationwide says orders have been depleted in recent weeks as Australians stay at home during the Omicron wave, compounded by staffing constraints as workers or their close contacts contract the virus and go into isolation.

Australia now has the seventh-highest daily case numbers globally for COVID-19 and more than 330,000 active cases, including 70 people on ventilators.

Doshii CEO Justin O'Donnell says around 60 per cent of the company's customers are in NSW and Victoria where the bulk of new cases are coming from with the sharpest drops in orders, although other states are following a similar curve as their case numbers rise.

"The amount of orders we help facilitate for our app partners is nowhere near what it was this time last year, and it’s almost mirroring in some areas when venues were shut down, especially in condensed areas," says O'Donnell, whose Melbourne-founded company helps venues operate more smoothly by integrating their apps with point of sale (POS) functions.

"We're not seeing a lot go through but at-home, delivery services are soaring," he says, noting the strong performance of partnerships with delivery players like DoorDash.

"Queensland was in a really good place until about a week ago, where we're now seeing orders start to drop again. In Perth we don’t have a massive presence, and there’s no real change at all there because they're in a very unique by keeping their borders shut, and then for South Australia, you can almost just watch the trend for each of the states for when you’re starting to see the numbers."

O'Donnell says his indoor beer garden The Park Darlinghurst in Sydney had 100 group booking cancellations in the week leading up to Christmas alone.

"The average of our bookings is eight to 10 people, so quite a lot of people who were going to come through the door that decided not to," he says.

It is a state of affairs that has led to a temporary shutdown for the venue, prompting managers to collaborate with other venues that are open to sharing staff so they can still have shifts.

"It's what we’re seeing as quite a common theme and I know a lot of the venues around us haven’t opened their doors," O'Donnell explains.

"There's the idea of people just not wanting to go out because there’s this massive spike and it’s an unknown – a lot of people are getting COVID – while the second bit is around the staff shortage with people who are getting COVID and the impact that’s having on venues.

"We’ve almost got a team of venues now where we’ve pretty much put all our staff in together, and we’re thinking how to help each other out. So if a venue shuts and teams at other venues get COVID, how do we actually send our staff into there so that we don't lose them."

He emphasises the great difference between the situation now and previous lockdowns is the "unknown".

"It's not just the government, it's people's mindsets. People have got to get comfortable again going out, and until they get there we’re not going to have the venue full with 250 people for quite a long time even though we can do that in the current restrictions," he says.

For Gold Coast-based restaurateur Dayna Cooper, co-owner of Orzo and Social Eating House and Bar, challenges have been more related to staff shortages than a lack of demand.

"We've just been taking each day as it comes. The first snap shutdown we had was at Social - on Boxing Day we found out there was a contact within the venue, and the very next day we shut it down for four days, and I'm talking the biggest week of the year so about $80,000-100,000 gone," Cooper explains.

"When the rules started to change on the contact tracing we were coming to the end of that closure, and I just said let’s open and start rapid testing the staff as they arrive at work every day...nobody’s helping us. We haven’t been contacted once by the government regarding any of these exposures.

"Orzo was closed for two days last week, and it was purely just to give the guys a day off, as we are working on such a limited team that they just can’t work seven days, and it would probably be lowering their immune systems as well."

While the Queensland Premier Annastacia Palazczuk reiterated today that the Gold Coast continues to lag behind the rest of Queensland on vaccination rates, it is still a tourism hotspot and some venues that are able to stay open are reaping the benefits.

"There are a lot of tourists and a lot of restaurants are closed down so it’s really limiting their choice. I was at work yesterday for four hours, and just from Orzo which is our smallest restaurant I turned away probably 70 people," she says.

She adds another significant difference between the circumstances now and during lockdowns is the lack of government support.

"We haven’t been offered any rent relief. There are no wage subsidies or anything like that, there’s absolutely no financial help at this point in time from the government.

"We have a financial buffer but that was supposed to be used for our renovations. We are in a good place and I’m very grateful that we did have such a fantastic 2021, but it is a shame that will probably be depleted."